The good news for the U.S. wine business, particularly producers in the North Coast, is consumers’ tastes continue to shift toward better-quality beverages and want to dive into the details about them.
The somewhat bad news is those consumers are navigating an ever-growing sea of alternatives to please their ever-more adventurous palates.
“The American consumer has access to more wines, both domestic and imported, than any consumer anywhere in the world,” said Antonio Galloni, founder of the wine reviews site Vinous in 2013 and former lead critic at “The Wine Advocate.” “That means there is a real challenge for a winery to capture the consumer.”
Wine lovers who seek out reviews and insights on Vinous are looking for a connection to the producer, a key factor in deciding where to spend their hard-earned money, Galloni said. That could be a great tasting-room experience or some interaction with the owner of a family-run operation. The one-on-one connection to an owner may be more challenging with a large-scale business or a corporate-owned vintner.
And vintners are competing with other specialty beverage-alcohol options, such as craft spirits and craft beer. That’s challenging because spirits brands tend to have better-funded marketing and advertising programs than the wine business.
“They are competitors for mindshare in bars and restaurants,” Galloni said. “That’s more because of novelty, but it also gets down to something else: that feeling that you’re having something special and not mass market, that you can’t just go out and buy at the local store.”
RISKS AND REWARDS OF ROMANCE
One of the biggest changes in the wine business in the last 25 years is it has transitioned from mostly family-run, semi-lifestyle operations to big business, where a lot of wineries are owned by multinationals, conglomerates or holding companies.
When the original family is no longer involved with the brand or ownership shifts to a group that owns a number of vintners, care must be taken to not lose a brand’s connection to consumers, he said.
“The cost of making a bottle of wine is well-known, and it’s not very expensive, so everything above that is romance — story,” Galloni said. “When you’re a family that’s been making wine for three generations, there’s a natural story to be told.”
A longtime customer can be forged through a great experience at a winery or when ordering the wine in a restaurant.
“I see with my readers that they visit one place, and it marks them forever,” Galloni said. “That’s a beautiful thing. That’s the romance.”
Having a compelling story and effective building connections makes the difference when consumers are faced with wines of varying prices but of comparable quality and from producers down the road from each other, he said. Tasting rooms and other face-to-face opportunities for producers to interact with consumers is essential for emphasizing those distinctions.
And direct-to-consumer marketing and sales is important for the bottom line of wineries that don’t have clout in the U.S. three-tier beverage-alcohol route to market of producers, wholesalers and retailers. The slice of a North Coast vintner’s profit margin going to the wholesale channel can be as high as 30 percent, so a number of small- to mid-scale producers strive to sell at least half to three-quarters directly to consumers, retailers or restaurants, where allowed.
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